Print
Health Care

LabCorp To Buy Chiltern In $1.2B Deal

By Cece Nunn, posted Jul 31, 2017
Global life sciences company LabCorp is expected to acquire Chiltern, a contract research organization with North American headquarters in Wilmington, the companies announced Monday.

The acquisition depends on a definitive agreement with Chiltern’s shareholders in an all-cash transaction valued at about $1.2 billion. Once the transaction is complete, Chiltern will become part of LabCorp’s Covance segment. The combination of Covance and Chiltern will mean LabCorp can provide "leading oncology expertise" with services across all phases of drug development, company officials said in a presentation Monday morning.

“This acquisition strengthens our position as a leading life sciences company that delivers innovative diagnostics and drug development solutions to improve health and improve lives,” said David King, chairman and CEO of LabCorp (NYSE: LH), in the announcement. “Our acquisition of Covance has demonstrated the value of combining diagnostic and CRO capabilities, expertise, data and leadership. The addition of Chiltern furthers our strategy and will provide us with enhanced capabilities across a broader client base as we continue to innovate and grow.”

The all-cash transaction, which LabCorp expects to fund with a combination of bank financing and bonds, is expected to close in the fourth quarter of this year and is subject to regulatory approvals and customary closing conditions.

Asked in what way, if any, the change might affect Chiltern's Wilmington presence, Sue Maynard, vice president of corporate communication for LabCorp, said in an email, "Until the transaction closes, LabCorp and Chiltern will continue to operate as two separate companies and conduct business as usual. For the vast majority of employees, we expect to offer continued and potentially increased career opportunities."

Chiltern is one of more than 100 companies that make up the clinical research and biotechnology industry cluster in the Wilmington area, according to a report published by the N.C. Biotechnology Center. PPD, which had reportedly been a potential LabCorp acquisition earlier this year before new investors were announced in April, is the largest of the area's 30 or more CROs.

Chiltern has more than 4,500 employees around the world, including in the Asia-Pacific region, and has conducted more than 1,800 studies across 87 countries in the past five years, the release said.

According to the release, Chiltern is a leading CRO among emerging-to-mid biopharma customers, with forecasted 2017 revenue and adjusted EBITDA of about $550 million and $95 million, respectively, and a backlog of about $1 billion.

“Joining LabCorp and Covance will allow Chiltern to expand its collaborative approach to bring better, more personalized therapies to market for patients every day,” said Jim Esinhart, CEO of Chiltern. “Customers will benefit from the expanded capabilities this provides and our employees will have a greater opportunity to propel research into the future with strong, supportive partners.”

Since acquiring Covance, LabCorp has grown the CRO business to nearly $3 billion in annual revenue, said John Ratliff, CEO of Covance, in the release.

“We now join with Chiltern to create a market-leading CRO, with more than 20,000 talented employees around the world. The addition enhances Covance’s offerings as a major partner serving the top 20 biopharma segment and expands our current offering to include a dedicated focus on the high-growth emerging and mid-market biopharma segments," Ratliff said. "We are very pleased to welcome the Chiltern team to the LabCorp family as we work together to realize the promise of this unique and powerful combination.”
Ico insights

INSIGHTS

SPONSORS' CONTENT
Lgoriginalheadshot 311794626

Wellness Programs: Taking It Off Your Plate

Laura Greenhow - Summerfield Custom Wellness
Cityclub

City Club Membership: Good For Business (And Pleasure)

Jonathan Weiss - City Club of Wilmington, LLC
Adamshay 300x300

Leadership Lessons From The Battleship

Adam Shay - Adam Shay CPA, PLLC

Trending News

Local Airbnb Hosts Earned Nearly $11M In 2017

Cece Nunn - Jan 15, 2018

Business Community Remembers Beth Quinn, Co-founder Of She Rocks

Christina Haley O'Neal - Jan 17, 2018

Investor Buys Leland Industrial Park Property

Cece Nunn - Jan 15, 2018

Piano Bar And Lounge To Fill Aubriana's Downtown Spot

Cece Nunn - Jan 17, 2018

Made Mole Brewing Coming To Oleander Drive This Spring

Jessica Maurer - Jan 17, 2018

In The Current Issue

Growth Spurt

More than 15 years ago, experts predicted that explosive growth would come sooner rather than later to Brunswick County. Although the Great...


Spectrum Expands Its Offerings On Bald Head

Spectrum recently launched new offerings for residential and business customers on Bald Head Island....


Megasites Hold Potential For Big Industry

Could the potential for landing the next major employer in the Cape Fear region lie in Brunswick County? Local and regional economic develop...

Book On Business

The 2017 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

WilmingtonBiz Expo - Keynote Lunch with John Gizdic, CEO, New Hanover Regional Medical Center
Wilmington's Most Intriguing People of 2017
2017 Health Care Heroes